What if there was no non-recurring cost in Q4-22? From Largo’s NR:
1) Net loss of $15.6 million in Q4 2022.
2) In Q4 2022, the Company’s net loss included approximately $6.3 million of non-recurring expenditures
The following chart shows that even if the non-recurring expenditures were removed from the equation Largo would still have a considerable loss of (US$9.3M) out of a revenue of US$47.5M in Q4-22. The unsettling realization is that, even without incurring any non-recurring cost, Largo must realize a revenue per pound well above US$7.7 (i.e the EuroV2O5 benchmark price must be way north of US$8.25/lb) for the company to break even. Note that Roskill considers US$8.00/lb as a good price for standard V2O5.
A clear indication that, even without the non-recurring expenditures, Largo is not a low-cost producer anymore.
Thank God that the average benchmark price for EuroV2O5 is in the US$10/lb range in Q1-23. Now at what revenue per pound can Paul Vollant realize in Q1-23? Who knows.
2022 All in US$ | Euro2O5 Benchmark Price per lb | V2O5 equivalence Sales Price per lb | Total Revenue | Non Recurring Costs | Net (Loss) | Net (Loss) excluding Non Recurring Costs |
Q4 | $8.25 | $7.77 | $47.5M | $6.3M | ($15.6M) | ($9.3M) |